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Community > US Payroll >

US Payroll - Void/Delete Unpaid Payroll Liabilities

Started by Brandon Scivolette -   in US Payroll

In 2017 I used Xero's payroll. In 2018, however, we began to use a 3rd party payroll provider. I still use Xero for accounting. As I am reconciling my payroll accounts I have found that there are unpaid payroll liabilities from 2017 that refer to accumulated time off/vacation hours. Since these unused/unpaid hours were moved to employee balances at the new payroll provider I want to zero the old ones out in Xero. But since they are attached to Xero payroll records I am unable to delete them. What would be the appropriate way to zero out the liability account?
Would it not be through a journal entry?
 

Shirley Antonucci  

Perhaps. But what would be the offsetting account?
 

Brandon Scivolette  

How about Wages/Salaries expense.
 

Shirley Antonucci  

I'm certainly not an accounting expert, but that doesn't seem correct to me. The unpaid time off liabilities I want to delete are a product of how Xero payroll tracked accrued time off/vacation. Since the accrued time off balances are now tracked by my current payroll company, they will be correctly reflected in Wages/Salaries when they are actually applied to the employee's paycheck.

Bottom line, I am not tracking accrued paid time off (that has not been taken) as a payroll liability in Xero anymore. The current liability balance is a product of how Xero recorded these records when I used their payroll.
 

Brandon Scivolette